Transcriptional regulation is orchestrated by numerous positively and negatively acting factors that ensure proper temporal and spatial gene expression, vital for the development, health and viability of organisms. To date, biochemical and genetic studies have identified many of these factors and have provided mechanistic insights as to how they function to coordinate gene regulation. However, most of these studies, which require fixation of chromatin, only provide a static "snap-shot" of the critical features of promoter architecture and mechanisms of regulation. However, more recent advances in optical technology allow for the real time imaging of transcription factors at loci in living cells. Recent studies from the Lis lab have utilized live cell imaging to study the dynamics and localization of Poll II at the HS loci in living cells. Intriguingly, these studies revealed that Poll II is progressively compartmentalized during the time course of transcriptional activation of HS loci. These transcription "compartments" are characterized by Poll II being actively recycled rather than a new polymerase being recruited or exchanged by neighboring active HS loci. This compartment could potentially allow recycling of the large battery of factors involved in coactivation, transcription elongation and RNA processing. The features of this compartment and its impact on transcription and gene regulation are targets of this proposal. The overarching hypothesis of this proposal is that live-cell imaging of transcription factors in vivo can provide novel mechanistic insights into the overall architecture of the transcription locus and how this may influence its regulation. Using novel optical imaging technologies, I propose to: (1) Define the properties/dynamics of factors (P-TEFb, Spt6 and CstF-50) that act during different points in transcription cycle and assess if they too are confined components of the transcription "compartment". (2) Examine how compartment formation influences mRNA trafficking and the rate of mRNA biogenesis at HS loci. (3) Determine the importance of the SCS/SCS'boundary elements and the activity of PARP on the formation and maintenance of the transcription "compartment". Relevance-Studying gene regulation is of particular relevance to human health, as misregulation of gene activity is a hallmark of many diseases, such as cancer. The primary focus of this project is to better understand the features of transcriptional regulation using the fruit fly model system. Most of the proteins that regulate gene expression in flies have corresponding activities in humans;therefore these studies may provide general insights into gene regulation. Importantly, these studies may also provide insights into how gene regulation may malfunction during human disease.